The Economy's Steady Pulse

Cleveland's historic manufacturing sector is shifting its production to supply the growing biomedical device companies. Before leaving the area, automotive and aerospace conglomerate TRW donated its headquarters to the Cleveland Clinic.

Around the country hospital systems are expanding, especially into suburbia.

"Growth among suburban hospitals is not because they're major research centers, rather because that's where patient volumes are growing," said Anirban Basu, health economics expert and chief executive of the Sage Policy Group, a Baltimore economic consulting firm.

Hospital Corp. of America, Virginia's largest for-profit health-care provider, and rival Inova Health System, Northern Virginia's largest nonprofit hospital chain, are battling for territory in Loudoun County, one of Washington's fastest-growing regions.

Thanks to Johns Hopkins University and the University of Maryland, more than half of Baltimore's top 10 employers are in the health-care industry.

"The message we're sending out is that the universities are open for business," said Brad McDearman, executive vice president of the Economic Alliance of Greater Baltimore. "They're not just locations for health care and research. They can help take an idea out to the marketplace so it can be a part of patient care."

Health care dominates in cities such as Pittsburgh and Memphis, said Gerard Anderson, a Johns Hopkins professor who specializes in health-care economics.

"Health care is either the largest or second-largest producer of jobs and good works for that community," he said. "Often, the nicest building in the city is the hospital."

On the West Coast, Henry J. Kaiser's booming World War II steel mill and shipyards have since dissolved. But Kaiser Permanente, the organization that took care of his workers, has grown to become the leading U.S. health plan and provider, employing more than 13,000 physicians nationwide, as well as scores of caretaker, administrative and technical employees.

Local counties striving for growth are crafting economic development strategies around health-care research and development. Loudoun's department of economic development has set its sights on the life sciences, hoping Howard Hughes Medical Institute's $500 million Janelia Farm research center will help put the growing county on the biotechnology and medical devices map. The business park Innovation at Prince William aims to turn the western end of the county into a life sciences and high-tech business hub.

By 2016, the Bureau of Labor Statistics predicts health-care employment to double the projected growth of all other industries combined.

"It's one of those industries that doesn't seem to be affected by economic downturn," said Terry Schau, an economist at the bureau. "People get sick, and they're going to need health care. The state of the economy may affect their ability to pay but not the demand."